January 20, 2009
California Overtime Regulations Part 1
Employee Settings to Suit California Overtime Regulations
California has it's own set of peculiar regulations for payment of overtime to employees. They are reasonably complex and are tedious when you have to apply and calculate them manually. As of Version 2.1.11 Time Clock MTS is now fully compliant with these regulations saving you a lot of time calculating your payroll and overtime pay. You can read about these regulations in detail on the Californian Department of Industrial Relations website. The relevant section of the page that applies (given that an employee is not subject to an exemption or exception) is:
1. One and one-half times the employee's regular rate or pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; and
2. Double the employee's regular rate or pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
Thus overtime can be split into two parts:
- Daily Overtime: hours worked between 8 and 12 in a single day are subject to 1.5 times the normal rate of pay. Hours worked in excess of 12 hours in a single day are subject to 2.0 times the normal rate of pay.
- Seventh day overtime: If an employee works for the first 6 days of a work week then they are eligible for overtime if they work on the seventh day of the work week. The first 8 hours of work on the seventh day are subject to 1.5 times the normal rate of pay. Hours worked in excess of 8 hours are subject to double the normal rate of pay.
Overtime Settings to Suit California Overtime Regulations
Setting up Time Clock MTS to comply with these regulations is simple. Firstly, you must edit the employee payroll information for each employee that is to receive overtime. In the first image in this post you can see an employee configured with overtime rate 1 set to 1.5 times the base rate of pay, and overtime rate 2 to double the base rate of pay. Once this is done for each employee you can then move on to the global overtime settings.
The second screenshot in this post shows Time Clock MTS configured to calculate overtime as per the Californian stipulations. Daily over time rate 1 is set to trigger at 8 hours and over time rate 2 is set to trigger at 12 hours. Weekly overtime is turned off and the calculation of overtime is set to daily overtime only. Lastly, the seventh day overtime setting is checked and the limit set to 8 hours.
In the next installment I'll cover modifying the Time Clock MTS report section templates to display the new payment amounts covered by overtime rate 2.
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Posted by mnemtsas at January 20, 2009 11:51 AM